In response to statements made regarding the Parshall Public School District, the State Auditor’s Office has released clarifying comments on the audit.
Q: Does the Auditor’s Office assure clients fraud did or did not occur?
A: No. Our office does not make determinations on criminality. Findings (areas of concern) our team identifies will mention “increased risk of fraud…” however our office is not responsible for determining if criminal activity did or did not occur.
Q: Does the Auditor’s Office participate in creating corrective action plans?
A: No. We share with audit clients what we found during the course of an audit. While our office can provide general guidance, it is up to the audit client to develop corrective action plans.
Q: What does “Disclaimer of opinion” mean?
A: In audit terms, “Disclaimer of opinion” is given when the auditor is unable to obtain enough information to base their audit opinion on. This type of opinion is the worst-case scenario in financial statement audits. Parshall Public School District received this type of opinion because of the following:
- Bank reconciliations were not performed during the audited period.
- Approximately 35% of expenditures tested were not supported by receipts or invoices resulting in a potential error to the financial statements of approximately $1.4 million.
- Approximately 65% of expenditures tested lacked evidence of school board approval resulting in a potential error to the financial statements of approximately $890,000.
- Capital asset records were not available and unable to be audited. The prior auditor reported approximately $6.3 million in net capital assets.